HomeFinanceHow Biden Might Try to Cancel Student Debt Next - UnlistedNews

How Biden Might Try to Cancel Student Debt Next – UnlistedNews

On June 30, after losing a Supreme Court lawsuit over his $400 billion plan to pay off student loan debt, President Biden said he was going to try again.

So what exactly does he propose to do?

in a fact sheet In announcing this second attempt, the White House wrote that the Department of Education will attempt to use the authority it believes it has under the Higher Education Act of 1965. In the Supreme Court case, the Biden administration attempted to claim power under a different law, the HEROES Act.

This process is likely to take several months at a minimum, and it’s unclear how many people might be eligible for any relief the administration eventually offers.

The fact sheet contained few details, but the administration said more in a press conferencerepeatedly referring to the “compromise and compromise authority” that the education law allows.

For a more detailed explanation, I turned to lucas herrineassistant professor of law at the University of Alabama and former legal director of Collective Debt, a membership organization and advocacy group working to pay off student loan debt. He is also the author of “The Law and Political Economy of a Student Debt Jubilee”, an article published in the Buffalo Law Review in 2020.

My interview with Professor Herrine has been edited and abridged for clarity.

I decided to go to law school as part of the long aftermath of the financial crisis. I was getting more and more politicized and disgusted with the political system, and I thought it would be helpful to go to law school to find out how the system works.

Through my work with the Debt Collective, I found the Compromise and Settlement Authority, which had been pointed out to me by other attorneys with more experience than myself. Why couldn’t this be used much more broadly? So I wrote the law review article which turned out to be very timely.

The Higher Education Act is the big statute that governs federal student loans, the authority that allows the Department of Education to issue them and create payments based on income, public service loan forgiveness, all of it.

There is a particular provision that gives the secretary of education authority to act as someone in charge of the program and pay off loans on a discretionary basis. It allows the clerk to “enforce, pay, pledge, waive, or release” the debt.

What does “commitment” mean? As a term of legal art, it means accepting a deal. Even more clearly, “resign and release” means “you no longer owe this.” That’s what the authority says.

As far as I can tell, there was no detailed conversation here. But I think what they meant is that if we’re going to have an agency that’s going to manage the debt—people can resist paying and there are all kinds of collection issues—we need to give the agency, like a wise manager, some flexibility. .

I don’t know if I can say that it isn’t. Clearly, the court will look askance at the breadth of any relevant authority, especially one that has not been used in this way before.

I think everyone agrees that the Higher Education Act gives the clerk authority to compromise when litigating against a borrower who is already in default. And I think most people agree that before collection actions against borrowers, they would want to cut their losses.

So we may have our own doubts about the scope of the Department of Education’s authority now, but we may focus our repayment efforts on the borrowers we think we’re going to have trouble collecting. Maybe they’ve been paying for 25 or 30 years, or they’re over a certain age. I can imagine a number of these categories.


I think a wiser decision would have been to start canceling the debt without requiring any request from the debtors and then challenge the court to reimpose the balances.

What I think we all agree on is that the court is skeptical of any assertion by the administrative authority, so you have to think about that, rather than just thinking about how to convince them.

My feeling is that Biden wants to run, at least partially, for re-election on this and be a little confrontational with the court and claim that what he did was illegitimate and we’re trying to do it again. Political pressure during the campaign and ongoing investigations in the Supreme Court could make the court more hesitant.

But even if they lose again, there are precedents. Many members of Congress draw on the wisdom of canceling student debt in their campaigns. The more these things become part of the Democratic Party, the more likely we are to get better legislative action.


Sara Marcus
Sara Marcushttps://unlistednews.com
Meet Sara Marcus, our newest addition to the Unlisted News team! Sara is a talented author and cultural critic, whose work has appeared in a variety of publications. Sara's writing style is characterized by its incisiveness and thought-provoking nature, and her insightful commentary on music, politics, and social justice is sure to captivate our readers. We are thrilled to have her join our team and look forward to sharing her work with our readers.


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